The year 2023 began on an unsettling note for people in the tech industry. Amazon was one of the first companies to announce mass layoffs in 2023 and Microsoft as well as Google followed suit. And now, healthcare technology provider Philips, has announced its decision to fire over 6,000 employees after laying off 4,000 people in October last year. The company incurred losses due to the piling returns of its faulty sleep respirators. As a result, it made the decision to cut down on job roles.

Philips to fire 6,000 people

As per an AFP report, Philips’ Chief Executive, Roy Jakobs, announced the layoffs and said that the year 2022 has been a difficult one for the company and they are taking ‘firm actions’ to improve their execution and performance.

“2022 has been a very difficult year for Philips and our stakeholders, and we are taking firm actions to improve our execution and step up performance with urgency,” Jakobs said in a statement.

Talking about the layoffs, he added, “This includes the difficult, but necessary further reduction of our workforce by around 6,000 roles globally by 2025.”

While the company plans on firing around 6,000 people in total, this year, only 50 per cent (3,000 people) of employees will be handed over the pink slip. Jakobs also said that the company would focus on “strengthening our patient safety and quality management and completing the Respironics recall.”

The AFP report also states that the company reported net losses of 105 million euros (around nine billion INR) for the fourth quarter of 2022 and 1.6 billion euros for last year as a whole. Most of these losses were due to the recall.

Philips faulty sleep respirators

Philips, in recent times, has undergone a paradigm shift and now focuses on making healthcare technology products. The change certainly hasn’t been an easy one. 

In 2021, the company announced a global recall of its sleep respirators, after concerns regarding the consumers’ safety while using the product surfaced. 

In a statement, the company had said at the time, “As a result of extensive ongoing analysis following this announcement, on June 14, 2021, the company issued a recall notification (U.S. only) / field safety notice (Outside of U.S.) for specific affected devices. The notification informs customers and users of potential impacts on patient health and clinical use related to this issue. Possible health risks include exposure to degraded sound abatement foam, for example, caused by unapproved cleaning methods such as ozone, and exposure to chemical emissions from the foam material.  High heat and high humidity environments may also contribute to foam degradation in certain regions.”

Talking about the replacements, the company added, “The company has developed a comprehensive plan to replace the current sound abatement foam with a new material that is not affected by this issue, and has already begun this process.”

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